I gave a short form of my answer in Jon_Dahl's other post, but I'll throw something in to the discussion here, as well.
I don't mind character death from bad luck occasionally. I've had characters die because of bad die rolls. Sometimes that happens.
However, mostly I feel like PC deaths should only happen for three reasons:
1) Poor PC decisions.
This doesn't mean stupid decisions, necessarily. It could mean the party gets beaten, fairly, by that group of trolls. Our group's dragonborn warlord died after getting grabbed by a mountain troll and smashed into a pulp. It made sense that he (the dragonborn) would put himself in harm's way, and that the troll would punish him for it, but it was just poor tactics by the party at the time. No hard feelings. Plus, it lead to some cool character stuff, when the PC realized he hadn't died, because of a resistance he forgot about earlier in the encounter.
2) Players leaving a game (but, it should not be the reason they leave the game!)
I don't usually kill a character when a PC leaves, but it is one of the times I see it as acceptable. But, like I said, a player should never leave because his character died. If it's that big of a deal, wave your DM wand and keep that character alive!
3) Story.
My cleric in Red Hand of Doom died during the final battle of the campaign. It was an awesome moment where he ran up to the final boss (the aspect of Tiamat) and threw his portable hole into a bag of holding to banish them both into the astral sea, and save the material plane from the aspect's wrath. He sacrificed himself to save everyone else, and it was an awesome and appropriate death for Clarke the Cleric of St. Cuthbert.
As a DM, I'm not a huge fan of PCs dying, but I do want my players to feel threatened. Like most have said. It's a balance. *shrug*